This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article.

July 1, 2011

Raymond James to Buy $650M of Allied Irish's Canadian Loans

The portfolio will be owned by Raymond James Bank and includes $500 million of outstanding loans

Raymond James Financial said late Thursday that it had entered into a definitive agreement to buy the assets of Allied Irish Banks’ Canadian operations. The Canadian portfolio being acquired includes some $650 million in loan commitments, of which $500 million is outstanding.

The portfolio, which will be owned by Raymond James Bank, is “highly diverse and performing well with loans located across various sectors throughout Canada,” the company said in a press release. “Through this transaction, Raymond James Bank has established a newly created finance company in Canada which will allow it to expand its corporate and real estate banking activity.”

According to CEO Paul Reilly (left), “This acquisition reflects Raymond James’ ongoing growth strategy to expand our existing corporate lending practice to other key markets. We are building on our already significant presence in Canada and leveraging the growing equity-capital markets business of Raymond James Ltd., our existing Canadian subsidiary,” he said in a press release.

Raymond James Financial, which is based in St. Petersburg, Fla., has some 5,300 advisors and $280 billion in client assets under administration. Most advisors do business in the United States, though some 445 serve clients in Canada. In the quarter ended March 31, Raymond James managed 12 corporate public offerings in the United States and 16 in Canada.

“This acquisition gives us a new dimension in the Canadian marketplace, and we look forward to working with our bank partners and clients in Canada,” said Thomas F. Macina, an executive vice president of Raymond James Bank, in a statement. “The acquisition will instantly increase Raymond James Bank’s corporate and real-estate portfolio by 10%, and it also reflects the bank's commitment to expand its business with equity-capital markets clients in Canada.”

The transaction, the terms of which will not be disclosed, is expected to close before the end of the September 2011 quarter and is subject to Canadian and U.S. regulatory approvals.

Earlier this week, Raymond James said it had reached a deal with regulators over sales of auction rate securities. As part of the deal, which concerns ARS sales made before mid-February 2008, Raymond James will buy back the ARS at par value, which is now about $280 million, and pay a fine of $1.75 million to state regulators. At the time of purchase, the ARS were valued at $2.1 billion.